Writing a letter to your credit card company to negotiate a debt settlement can help you pay off your balances for less than what's owed. Not every creditor is opened to the idea of a debt settlement, though. Before approving your request, creditors examine details of your current financial standing.
Provide account information. Begin your letter by introducing yourself and including your account number and balance owed.
State your reason for writing the letter. Credit card companies receive letters regarding negotiations and credit disputes daily. Mention early in the letter that you're writing to negotiate a debt settlement in order to pay off your balance for less than what you owe.
Discuss how much you can afford to pay. Don't let your creditors decide the settlement amount. This can result in agreeing to a settlement that's beyond your price point. Look at your income first, and then determine what's affordable. Offer this settlement amount in your letter.
Explain reasons for needing a debt settlement. Credit card companies will not settle your debt if you have the ability to pay the money. For this reason, explain your situation in your debt settlement letter. Include a listing of your debts and other monthly expenses, and make copies of your income statements. Highlight any changes to your income, such as loss of employment, reduced hours or illness.
Write honestly. If you're contemplating bankruptcy to remedy your outstanding balances, state this information in your debt settlement letter. A bankruptcy discharge can erase your debt, wherein you owe nothing to your creditors. Creditors may willingly negotiate in order to avoid having the debt erased in a bankruptcy.
Get the settlement agreement in writing before sending the money. Your creditor may offer a countersettlement. Once you both agree to a settlement amount, ask the creditor to put the agreement in writing and send you a copy. Keep this copy for your personal records.